Transformational deals and strategic success

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Results of PwC’s 2017 M&A integration survey

Transformational deals continue to increase

M&A goals are changing. Without question, many companies still use deals to achieve economies of scale and improve efficiency. But increasingly, they're also trying to achieve transformation. This trend continues to build as more than half of Fortune 1000 survey respondents described the largest transaction they completed in the last three years as transformational, up from 44% in 2013 and just 29% in 2010. 

Technology is radically remaking the way people all over the world work, shop, communicate, travel, get an education, invest, buy a home, entertain themselves, and even find love. Under intense pressure to innovate, many companies are clearly using deals to attain the capabilities they need to stay competitive. For some, that can mean integrating two very different business models and cultures.

When transformation is the goal, organizations find strategic success more elusive

When a deal is transformational, strategic and execution risks are high. It's not surprising that under these conditions, survey respondents are reporting strategic success less frequently than in former years. As illustrated in the diagram, more dealmakers say their transactions achieved operational success, and exactly half report a financially successful deal, up a smidgen from 2013. Only strategic success has grown harder to come by.

Go-to-market goals are not being realized 

Fewer companies in 2016 reported complete success in achieving their M&A goals-no matter what the goal. Go-to-market goals are getting harder to achieve, particularly with the rise of transformational deals, as companies increasingly want their deals to deliver new offerings to their existing customers or sell to an entirely new type of customer. Success rates fell in all go-to-market categories.

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Gregg Nahass

US and Global M&A Integration Leader, PwC US

Curt Moldenhauer

Deals Sales & Marketing Leader, PwC US

Marc Suidan

Technology, Media and Telecommunications Deals Leader, PwC US

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